By Diane Swonk, chief economist, Grant Thornton

Payroll employment rose by 661,000 jobs in September, less than half the 1.5 million pace we saw in August. Government employment fell by 216,000 with 34,000 of those losses due to a reduction in the ranks of temporary Census workers; the remainder was due to a drop in education employment at the state and local levels. Many schools and colleges went back to online courses, which cut into the support and administrative staff in schools and on college campuses. Total employment is still down 10.9 million jobs since February. That is 24% more than we lost to the Great Recession in 2008-09 in about half the time. Employment at the state and local levels is still down more than 1.2 million since February. Those losses are expected to compound unless Congress acts on aid – we need more help for households, businesses, and states and local governments, ASAP.

Private sector employment rose by 877,000 jobs, nearly 40% below the 1 million pace of August. Leisure and hospitality jobs drove overall gains. The survey week this year included the Labor Day holiday. Most seasonal workers are laid off after the last big holiday of the summer comes to an end. Leisure and hospitality jobs actually dropped before seasonal adjustment for the month. Many bars and restaurants reopened with fewer restrictions but those gains could be short-lived once temperatures drop. COVID is airborne and much more contagious in indoor venues. The level of employment in that sector is still off more than 3.8 million jobs from a peak in February.

Retail trade and health care continued to call workers back. Retailers are still reopening and starting to hire to deliver better online service during the holiday season. Retail employment is expected to actually drop as we get into November, on a seasonally adjusted basis. Health care workers continue to be recalled as people catch up on postponed elective surgeries and doctor and dental appointments missed earlier in the year. The number of home health care jobs also increased. Nursing and residential care jobs were almost unchanged after falling in recent months. This reflects shifts many people have made in where their elderly loved ones live. Day care employment was up for the month as parents scrambled to deal with hybrid and online education.

Warehousing and transportation jobs increased 74,000 in May. The largest gain was in warehousing and storage. This separate from retail gains at the largest online retailers, which are included in retail, but reflects a move by smaller retailers to move more of their businesses online.

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